Updated

Competition Bureau is reviewing transaction

Postmedia and Torstar have swapped more than 40 local community newspapers with each other, and most are destined to be shut down.

The media companies announced in a press release Monday morning that Postmedia would get two dozen community newspapers and two free commuter dailies from Torstar, and at the same time give 17 newspapers — 15 community papers and two big-city free commuter dailies — to Torstar.

No cash changed hands during the deal, as the papers "have approximately similar fair values," Postmedia said, but the fate of almost all papers is the same — they're destined to be closed either immediately or soon.

Postmedia took over:

Belleville News.

Brant News.

Central Hastings News.

Exeter Times-Advocate.

The Exeter Weekender.

Frontenac Gazette.

Kanata Kourier-Standard.

Kingston Heritage.

Meaford Express.

Nepean/Barrhaven News.

Norfolk News.

Orleans News.

Ottawa East News.

Ottawa South News.

Ottawa West News.

Our London.

Quinte West News.

St. Lawrence News.

St. Marys Journal-Argus.

The St. Marys Weekender.

St. Thomas/Elgin Weekly News.

Stittsville News.

Stratford City Gazette.

West Carleton Review.

In addition, Postmedia will acquire the free commuter newspapers, Metro Ottawa and Metro Winnipeg. Postmedia already owns other newspapers in both of those cities, and plans to shut down Metro in each of them.

The only papers in the deal that Postmedia plans to keep running are the Exeter Times-Advocate and the Exeter Weekender. In total, the closures of all the others will result in the loss of approximately 244 jobs.

"The continuing costs of producing dozens of small community newspapers in these regions in the face of significantly declining advertising revenues means that most of these operations no longer have viable business models," Postmedia chair Paul Godfrey said.

For their part, Torstar got these newspapers:

Barrie Examiner.

Bradford Times.

Collingwood Enterprise Bulletin.

Fort Erie Times.

Innisfil Examiner.

Inport News (Port Colborne).

Niagara Advance.

Niagara Falls Review.

Northumberland Today.

Orillia Packet and Times.

Pelham News.

Peterborough Examiner.

St. Catharines Standard.

Thorold Niagara News.

Welland Tribune.

In addition to the smaller community papers, Torstar also got two new free commuter newspapers in major cities, 24 Hours Toronto and 24 Hours Vancouver.

As is the case with Postmedia, most of Torstar's new properties are to be shut down, including those two.

Postmedia chair Paul Godfrey says most of the papers in the deal no longer have viable business models. (Pawel Dwulit/Canadian Press)

Only four papers — St. Catharines Standard, Niagara Falls Review, Welland Tribune and Peterborough Examiner — will continue to operate.

The rest will all be closed in a move that Torstar says it expects will results in cost saving synergies of between $5 and $7 million. The Torstar closures, which are effective immediately, will affect 46 full-time and part-time employees.

"By acquiring publications within or adjacent to our primary areas and selling publications outside our primary areas, we will be able to put a greater focus on regions where we believe we can be more effective in serving both customers and clients," Torstar chief executive John Boynton said.

Because no cash changed hands in this case, the bureau wasn't informed — but that doesn't mean it's being bypassed, or that the deal doesn't require its approval.

"I can confirm that the Competition Bureau will be undertaking a review of the transaction," a spokesperson told CBC News in a statement.

"Under the Competition Act, transactions of all sizes and in all sectors of the economy are subject to review by the Commissioner of Competition to determine whether they will likely result in a substantial lessening or prevention of competition in any market in Canada."

It's hard to see how wiping out three dozen newspapers — some in markets that don't have any others — won't lessen competition in an already reeling industry. Bob Cox, the chair of the Canadian Newspaper Association, said news of the largest mass closure of newspapers ever in Canada is "a disappointment, obviously," but added that it hopefully adds credence to his group's argument that the industry is on the precipice of even larger failures.

"I'm not in the least bit surprised," he said in an interview with CBC News. "We predicted this would happen."

Cox's group has been lobbying the government to provide financial support for the industry, which has been waylaid by a massive decline in advertising revenue. Those efforts have been described as asking for a bailout, but that's a mischaracterization, Cox says.

"We argue for supporting news providers, whether they be digital or whatever, to help the industry transition," he said.

As for the communities affected, Cox doesn't expect any new alternatives will spring up to provide news and information in the short term.

"What happened with these newspapers is, time ran out for them," Cox said. "This is reality. There will be less news in those communities."

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